German Giants Pour Over $500 Million Into AI Startup Aleph Alpha

Agatha Cantrill and Mark Bergen, Bloomberg News

COLOGNE, GERMANY - SEPTEMBER 08: Jonas Andrulis, founder & CEO Aleph Alpha, speaks during day 2 of the Digital X event on September 08, 2021 in Cologne, Germany. More than 200 national and international top speakers - experts, visionaries, politicians, entrepreneurs, opinion leaders and critical voices - take part to discuss in two days of a full digitisation programme. (Photo by Andreas Rentz/Getty Images) , Photographer: Andreas Rentz/Getty Images Europe

(Bloomberg) -- Aleph Alpha GmbH, an artificial intelligence startup trying to build a European rival to the large language models created by OpenAI and Google, has raised more than $500 million from a consortium of industrial giants and financial investors.

Schwarz Group and the venture arm of Robert Bosch GmbH joined a group of seven new investors in the financing round, which included SAP SE and US software firm Hewlett Packard Enterprise, the company said in a statement on Monday.

Aleph Alpha is positioning itself as a local, European champion for the technology as a way to stand apart from US-based competitors. At a press conference on Monday, Germany’s Vice Chancellor and Minister for Economic Affairs Robert Habeck framed the investment as a strategic national priority.

“The thought of having our own sovereignty in the AI sector is extremely important,” Habeck said at the press conference. “If Europe has the best regulation but no European companies, we haven’t won much.”

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The companies said their investment included “commitments for joint business development” with Aleph Alpha, but did not provide further details. The German research hub, the government-backed Innovation Park Artificial Intelligence, Christ & Company Consulting and Burda Principal Investments, as well as existing investors also participated in the round.

Aleph Alpha’s last fundraising round, €23 million in 2021, was overshadowed by a flurry of competitors that raised exponentially more — a necessity for technology that relies so heavily on expensive computing power. Anthropic, a US startup that touts similar safety features, has been in talks to raise as much as $2 billion following a $4 billion investment from Amazon.com Inc.

Aleph Alpha was formed in Heidelberg, Germany, by Jonas Andrulis, a former engineer for SAP and Apple Inc. While it works on large language model technology, similar to ChatGPT, Andrulis pitched applications for European enterprises, such as security and data privacy.

“These are all partners with which we have worked for years,” Andrulis said at the press conference. “What was so important for me, right from the beginning with our research, is transparency, traceability and sovereignty.”

Anthropic, OpenAI and Google have also expanded their generative AI offerings for businesses in the US and Europe. Mistral, a French startup formed earlier in 2023, raised $113 million in its initial round of financing, and similarly pitched itself as a European alternative to Silicon Valley.

Aleph Alpha’s investment announcement didn’t specify a valuation.

(Updates with comments from the press conference starting in the third paragraph)